"they do not have to pay in the UK."
Indian workers are to be exempt from social security contributions from July 2026 after an agreement with the UK.
The Double Contribution Convention (DCC), which forms part of the wider India-UK Comprehensive Economic and Trade Agreement (CETA), will exempt employees temporarily transferred from India to the UK from paying social security contributions in Britain for up to five years.
The agreement is expected to provide significant savings for Indian businesses and professionals working on temporary assignments, particularly in the IT sector.
More than 75,000 Indian professionals and over 900 companies are expected to benefit from the arrangement, which prevents temporary workers from making social security contributions in both countries simultaneously.
Indian-origin professionals currently contribute around £378 million annually to the UK’s social security system.
Officials estimate the average annual salary of an Indian professional working in the UK is between £40,000 and £50,000, with around 15% typically going towards social security contributions.
Under the new agreement, employees who continue contributing to India’s social security system will no longer have to make equivalent payments in the UK during temporary assignments.
An official said: “If an employer is contributing in India for the social security of the employee, they do not have to pay in the UK.
“For that, they have to share a certificate of coverage. It is for Indian companies and prospective in nature.”
The exemption only applies to employees of Indian companies temporarily posted to Britain. Indians employed directly by UK companies or other foreign businesses operating in the country will not qualify.
Officials believe the measure will provide a major boost to India’s IT services industry, which regularly deploys skilled professionals to the UK for short-term projects.
The agreement addresses a long-standing concern for Indian businesses, as workers on temporary assignments often paid into the UK’s social security system despite being unlikely to qualify for benefits.
In most cases, eligibility requires around 10 years of contributions, while many overseas assignments last only a few years.
The DCC forms part of the wider CETA, signed on July 24, 2025, which is scheduled to come into force on July 15, 2026.
While the social security agreement is expected to deliver immediate benefits for professionals, officials also confirmed that both countries had resolved another key issue involving UK steel safeguard measures.
The UK recently announced safeguard measures reducing duty-free steel import quotas by 60% from July 1. Imports exceeding those quotas will face a 50% tariff, up from the previous 25%.
Officials said only £103 million, or around 15%, of India’s £680 million steel exports to Britain would be affected.
The remaining 85% of exports will retain market access through a combination of country-specific quotas and residual quotas negotiated under the trade agreement.
Indian exporters will also be able to use the Authorised Use Scheme, allowing eligible industries to import steel at reduced or zero duty where materials are used for approved purposes.
The official said: “As an outcome, India will not lose market access. India and the UK have struck a balanced outcome without impacting the agreement and processes did not have to be started again.”
Officials said negotiations over the past two months focused heavily on resolving the steel dispute, which had threatened to delay implementation of the trade deal:
“We have been engaged in the last two months to resolve the issues… the key issue holding us back was the steel measure.”
The final deal was drafted within the “realm of reality” with regards special carve-outs for six steel product categories, including hot-rolled steel sheets and strips.
The government will spend the next 28 days issuing customs notifications and completing administrative processes to ensure exporters can begin trading under CETA as soon as it takes effect.
India had previously raised concerns about the UK’s proposed safeguard measures at the World Trade Organisation in May. However, officials said the issue has now been resolved through bilateral negotiations.
The official also said discussions on the UK’s proposed Carbon Border Adjustment Mechanism, expected to begin in 2027, remain ongoing.
The mechanism has not yet been finalised, although CETA includes provisions allowing it to be incorporated into the agreement at a later stage if required.
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